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October, 2017 4:00 AM



Climate gets low business priority: report

Climate gets low business priority: report

Only 40 per cent of the top 100 Australian companies, such as BHP Billiton and the Commonwealth Bank , currently acknowledge climate change as a financial risk.

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By AAP 12.10.2017 03:51 PM

Fewer than half of Australia's biggest companies recognise climate change as a financial risk, a new global report has found.

A KPMG international bi-annual survey on corporate responsibility and sustainability (CRS) across 4,900 organisations worldwide, found that while there was a small increase in global attention to CRS by big companies, Australia has continued to plateau since 2015.

Only 40 per cent of the top 100 Australian companies currently acknowledge climate change as a financial risk in their annual reporting, according to the report.

Notably, of the 100 Australian companies studied for the report - 75 listed companies, 15 public sector organisations and 10 super or pension funds - the report found there was limited action on climate change despite increasing regulatory pressure.

KPMG global leader for sustainability reporting and assurance Adrian King said Australia's findings were consistent with world-wide levels.

Globally, only 28 per cent of companies currently acknowledge the financial risk of climate change, while among the world's 250 largest companies (Fortune Global 500), a higher 48 per cent acknowledge the risk.

Mr King said Australia's results are, however, likely impacted by the timing of reporting season.

"There will be a significant increase in activity and disclosures in relation to climate risk in the next reporting cycle as entities get up to speed with this fast evolving and relatively new framework," Mr King said.

"Many of the 30 June 2017 annual reports released in the last few weeks are already demonstrating this."

The survey found of those 40 per cent that currently acknowledge climate change as a financial risk, a relatively high proportion provided some narrative description of the potential impacts.

But, very few are currently quantifying the potential impact of those risks in financial terms.

The release of the report on Thursday comes after federal energy minister Josh Frydenberg on Monday appeared to be steering the government away from the Clean Energy Target recommended in the Finkel Report, suggesting the falling cost of renewables could lead to Australia's energy market reaching sustainable emissions levels without regulatory support.

Mr Frydenberg said the government was considering its new policy against a backdrop of the rapidly falling cost of renewables and storage, greater efficiencies being found in thermal generation and the need for power that can be delivered according to the market's needs.

The KPMG report also found Australia is lagging behind global peers in corporate responsibility reporting, with only 54 per cent of organisations acknowledging human rights as a business issue.

That compares to 68 per cent in the Middle East and Africa, 69 per cent in the Americas, and 75 per cent in Europe, the survey found.

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